The number of early arrears cases increased by approximately 3,000 in the second quarter of this year compared to the same period last year, as reported by the Central Bank. The rise in arrears numbers is expected to continue in the coming months, with thousands of mortgage holders seeking assistance due to their inability to meet higher mortgage repayments.
The increase in the European Central Bank’s main lending rate has negatively impacted tracker mortgage customers and those on variable rates who are currently dealing with vulture funds. On a positive note, the Central Bank’s figures indicate a decline in long-term arrears, thanks to more individuals opting for personal insolvency arrangements and the mortgage-to-rent scheme.
According to the Central Bank, there were a total of 29,346 residential mortgage accounts in arrears during the second quarter of this year, accounting for 4% of all residential mortgage accounts. The number of accounts in long-term arrears (one year or more) decreased by 3,653 to 21,400. However, the number of accounts in arrears for three months or less increased by 2,852 in comparison to the same quarter last year. Nevertheless, this represents a decrease of 1,889 compared to the previous three-month period, according to the regulator.
Non-bank entities, including non-bank lenders and vulture funds, make up 16% of all residential mortgages, and account for 75% of arrears lasting more than a year. Additionally, close to 6,000 accounts are currently subject to legal proceedings, leaving these mortgage holders at risk of repossession.
In recent months, the Irish Mortgage Holders Organisation has witnessed a significant increase in the number of individuals seeking help, with many depleting their savings to make mortgage payments. Short-term arrangements have likely been implemented to prevent these individuals from being classified as in arrears. Another personal insolvency expert, Mitchell O’Brien of IRS Ireland, reported a 475% surge in financially distressed individuals seeking assistance.
One of the reasons for the growing popularity of personal insolvency arrangements is the approval of a personal insolvency arrangement by Tullamore Circuit Court, which will require mortgage servicer Pepper to provide a fixed rate of 2.5% for 25 years. Furthermore, Taoiseach Leo Varadkar believes that any mortgage interest relief package in the upcoming Budget should be targeted at those paying the highest rates and at risk of losing their homes, due to the associated costs.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
